210. “We make $170k—but spend like we make $450k”

Summary

Episode 210: “We Make $170k—but Spend Like We Make $450k”

Podcast: Money For Couples with Ramit Sethi
Host: Ramit Sethi
Release Date: May 27, 2025

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Introduction

In Episode 210 of Money For Couples, Ramit Sethi delves into the financial struggles of Clara and Devin, a married couple earning a combined $170,000 annually but grappling with expenditures that make it seem like they earn $450,000. This candid conversation uncovers the underlying money psychology impacting their relationship, revealing how spending habits, debt, and financial dynamics strain their marriage and family life.

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The Couple’s Financial Situation

Clara and Devin present a complex financial profile characterized by significant debt and minimal savings, despite a respectable combined income.

• Net Worth and Debt:
  • Net Worth: Approximately $318,000
  • Debt: $477,000 (including mortgage, credit card debt, and student loans)
  • Investments: Only $16,000
  • Savings: $0
  • Fixed Costs: 74% of income
  • Guilt-Free Spending: 25% of income

Notable Quote:
"We make $170k a year, but our fixed costs are pretty high at 74%. We're spending 25% on guilt-free spending." [01:07]

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Money Dynamics and Conflicts

The core of Clara and Devin's financial turmoil lies in their conflicting approaches to money management, creating a toxic parent-child dynamic.

• Roles:
  • Devin: Acts as the "parent," rigidly controlling finances and scrutinizing every expenditure.
  • Clara: Takes on the "child" role, struggling with self-control over spending, leading to debt accumulation.

Notable Quotes:

• Devin: "I feel like he's my auditor. I have to be careful or I have to tell him first what I'm gonna get because my auditor is gonna audit me again at night." [03:34]
• Clara: "It's a little unfortunate. I know I tend to have a lot of control. I'm coming from a very finance, accounting-heavy background." [05:22]

---

Ramit’s Analysis and Insights

Ramit identifies several red flags in their financial behavior and relationship dynamics:

• Discrepancy Between Income and Spending:
  Despite earning $170,000, their spending patterns and debt levels suggest they’re living beyond their means, akin to earning $450,000.

• Investment and Savings Deficit:
  Only 1% of their income is directed towards investments, with no savings, leaving them vulnerable to financial emergencies.

• Gambling as a Financial Coping Mechanism:
  Devin admits to sports betting as an attempt to "make money," further exacerbating their financial instability.

Notable Quote:
"The way you're spending is like you make $450,000 a year." [00:45]

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Action Plan and Resolutions

Ramit guides Clara and Devin through a series of actionable steps to recalibrate their financial relationship and reduce debt:

1. Cutting Unnecessary Expenses:

   • Eating Out: Currently over 30 times a month, they agree to reduce it to twice a month.
   • Subscriptions and Phone Bills: Aim to cut subscriptions to $50 and phone bills to $100 monthly.

   Notable Quote:
   "We just cut our spending on subscriptions to $50 and our phone bills to $100 each." [54:04]

2. Eliminating Debt:

   • Credit Card Debt: Devin has reduced debt from $20,000 to $9,000 and plans to continue paying $200 per card monthly.
   • Car Payments: Sell one old Jeep to allocate $7,000 towards the high-interest EV car loan, even though it incurs some loss.

   Notable Quote:
   "I'm putting the $7,000 from selling the Jeep into savings instead of paying off a zero-percent loan." [46:35]

3. Building Savings:

   • Immediate focus on creating an emergency fund to prevent future financial crises.
   • Allocate leftover funds ($3,500 from Clara) directly into savings each month.

   Notable Quote:
   "I'm going to put a majority of that $3,500 into savings." [56:00]

4. Reevaluating Investments and Retirement Planning:

   • Clara acknowledges the need to start saving for retirement despite her inclination towards quick returns through gambling and collectibles.
   • Devin expresses a desire to increase his 401(k) contributions and eliminate sports betting.

   Notable Quote:
   "I think there's nothing I do disagree on, especially when it comes down to the cars." [63:00]

---

Conclusion

Clara and Devin’s interaction with Ramit highlights the critical need for transparent communication and shared financial goals in a marriage. By confronting their financial missteps and committing to a structured spending plan, they take the first steps towards rebuilding their financial stability and strengthening their relationship.

However, Ramit emphasizes that continuous effort and mutual support are essential for sustaining these changes. The episode serves as a poignant reminder that financial harmony in relationships requires both partners to actively participate, respect each other’s roles, and prioritize long-term goals over short-term gratification.

Final Notable Quote:
"We're going to make some huge changes, but we can do it together as a team." [60:09]

---

Key Takeaways

• Awareness: Understanding the real financial picture is crucial before making changes.
• Communication: Open and honest discussions about money can prevent resentment and misunderstanding.
• Responsibility: Both partners must take active roles in managing finances to achieve a balanced and supportive financial dynamic.
• Planning: Establishing clear financial goals and a conscious spending plan can help navigate out of debt and build savings.

---

This episode underscores the intricate link between money management and relationship health, offering valuable lessons for couples striving to achieve a "Rich Life" together.

Transcript

[Ramit Sethi]

If you're enjoying the Money for Couples podcast, I'd love to hear more from you. In the show notes below, I've added a quick listener survey. It helps me understand more about you and what you think of the podcast.

[Unknown Host]

So that we can constantly work on.

[Ramit Sethi]

Creating more episodes for you.

[Unknown Host]

So please do me a favor.

[Ramit Sethi]

Check out the show notes and take.

[Unknown Expert]

Five minutes to fill out this quick survey.

[Ramit Sethi]

We read every single response. Go to iwt.com podcast he's like this.

[Devin]

Money we make now, we spend now.

[Clara]

I think she might be low key, a bit of a shopaholic. I told her that this is not going to fly going forward.

[Devin]

I feel like he's my auditor.

[Clara]

She went a little nuclear.

[Devin]

I've accrued 20,000, was served a summon from the court. Somebody sued me.

[Clara]

She's the one that I feel like needs a little bit more help.

[Unknown Expert]

The way you're spending is like you make $450,000 a year.

[Devin]

I started contemplating it's probably better if we're not together because I don't want to have to deal with this.

[Clara]

My whole life I've resulted the other avenues of trying to make more money gambling and more on the collection side.

[Unknown Expert]

What the gambling on what?

[Devin]

Sports betting?

[Unknown Expert]

Is this a joke?

[Clara]

Well, we're still here, still alive, still above the water. Haven't drowned yet.

[Unknown Host]

I'm about to speak with Clara and Devin. They're married with three kids and Devin is a self proclaimed numbers guy who works in finance. Clara wrote in and said quote my my dream is to bounce back from credit card debt and to be responsible enough so I can gain my husband's respect and trust. That's quite a striking thing to say. If she's dreaming of earning her husband's respect, I have to imagine there's a lot beneath the surface. I'm looking at their conscious spending plan right now. You can download your [e-mail] CSP and a few things immediately stand out. Their total net worth is around 350k which is good for a 29 and 34 year old with 3 children. But their investments are only at $16,000. That is a red flag, especially for someone who works in finance. They earn $170,000 a year, but their fixed costs are pretty high at 74%. Now yes, three kids can make fixed costs temporarily high, but I want to look into that. I also noticed that they're investing just 1%, they're saving nothing each month and they are spending 25% on guilt free spending. When I hear Clara say That she's in credit card debt. It's easy to assume that she's the problem. But the more I dig into their story, the more I start to wonder if I'm getting it all wrong.

[Unknown Expert]

If you're enjoying the Money for Couples.

[Unknown Host]

Podcast, I want to hear from you. In the show notes below, I've added a quick listener survey. This is really important. It helps me understand more about you and what you think of the podcast so that we can work on getting more episodes and making them even better for you. So please, do me a favor. Go to iwt.com video pod.

[Unknown Expert]

Take five minutes to fill out this quick survey.

[Unknown Host]

We are going to read every single response. Again, that's iwt.com/videopod.

[Devin]

I feel like he's my auditor. For example, I swipe $2, like 250 pacifier for the baby. I'd get a text, what is this 250 for? Or what is this 950 purchase? And you know, it's become a joke even into my own family.

[Unknown Expert]

Like, what's the joke?

[Devin]

The auditor is here. Like, I have to be careful or I have to tell him first what I'm gonna get because my auditor is gonna audit me again at night. So there's that dynamic.

[Unknown Expert]

I would love to check in with the auditor himself. Mr. Auditor, what do you have to say about. Look, he's been waiting the whole time. He's like cracking his knuckles right now. He's like, it's, yeah, man, go ahead, tell us what's going through your head right now.

[Clara]

It's something that I don't have a lot of faith in My wife, she's great at everything else she does. It's just not her forte when it comes down to handling money.

[Unknown Expert]

How often do you talk about money?

[Clara]

Every night. I think I have all the access I can on my phone to look at the accounts. I keep a spreadsheet on one of those.

[Unknown Expert]

One of those. What does that mean?

[Clara]

Just making very sure that I have all these things under control because I feel like this is my forte. And with my wife not really being hands on with it, I can handle a little bit more comfortably and that I'm confident in. So I just want to make sure that doesn't go down the drain.

[Unknown Expert]

How would you describe your relationship with money?

[Clara]

I'd say it's pretty good. I've gone pretty far in my career with it. Something that I take pride in too.

[Unknown Expert]

What about in your personal relationship?

[Clara]

Yeah, definitely is a struggle.

[Unknown Expert]

Okay. Claire, I want to start by reading Some moments in your application that stood out to me. You wrote, we have differing views on money, not enough financial literacy. My husband is very anal with our finances and I lack self control over my spending habits. We argue a lot in terms of how much I spend. There's a lot of yelling, which is unhealthy for our little ones to witness. What comes up for you when you hear that application out loud?

[Devin]

That's what I feel whenever I talk to my husband about our finances. I would like for his tone to change. Right. I would want to be able to gain his respect. I want him to view me as a responsible adult who knows how to have self control and be on top of finances.

[Unknown Expert]

Devin, what about you hearing that?

[Clara]

It's a little unfortunate. I know I tend to have a lot of control. I'm coming from a very finance, accounting, heavy background. So in regards to, like my wife, she is the one that I feel like needs a little bit more help. I've already exhausted a lot of my avenues with her as far as being gentle, being understanding, being firm. And then when you've pretty much exhausted all the options, it's a little hard and annoying to have these conversations over and over.

[Devin]

This is the part that sucks. Devin can get a bit like, condescending in terms of this topic. And that's what I hate about the dynamics of our relationship. He talks to me like I'm a child. There's that you follow what I say and you can't spend anything if it doesn't go by me. And I don't like that. I just don't respond well to that.

[Unknown Expert]

If I felt like my partner was talking to me as a child, I wanted to stop. And if I feel like my wife doesn't know anything about money, I want her to learn.

[Unknown Host]

Okay, what do you notice immediately? I can sense the tension and it's clear that they're operating under some version of the parent child money dynamic. That dynamic is where one partner starts to function as the responsible parent when it comes to money and the other starts behaving in a childlike way. In this case, Devin is the parent and Clara is the child. And this dynamic is no good. It's absolutely toxic to relationships for two reasons. Number one, your partner is not a child and you're not going to get them to act like an adult by.

[Unknown Expert]

Treating them like a child.

[Unknown Host]

Number two, this dynamic is absolute sexual kryptonite. If you have a similar money dynamic in your relationship where one person acts as the parent and constantly teaches the other, does everything for the other. And the other is in many ways helpless and delegates everything and says you handle it. You may be in the parent child dynamic with money. You don't want that. I cover more in my new book, Money for Couples. Now the good news is we can change this dynamic, but first I need to understand how they got themselves here. And their backstory is pretty interesting.

[Unknown Expert]

Devin, why don't you trust Clara with money?

[Clara]

Oh boy, where do I begin? There was one instance she went a little nuclear. She went to the Taylor Swift concert eras tour, got the floor, seats, the whole shebang. And you know, that set her quite back.

[Devin]

I'm just laughing because it's embarrassing. I spent $4,600.

[Unknown Expert]

Is that one seat or two?

[Devin]

No, that's just one. He didn't come with me. I was happy to cover for his ticket, but he's like, no, no.

[Unknown Expert]

So from what I'm hearing, she ran up a bunch of debt.

[Clara]

Yeah, pretty much. I immediately told her that this is not going to fly going forward and I'm going to manage everything.

[Unknown Expert]

What was the total amount of debt that you accrued?

[Devin]

So for my credit card, I've accrued 20,000. That's a combination of five credit cards.

[Unknown Expert]

What did you charge on those cards to get 20k of debt?

[Devin]

So I did that, and then I furnished our backyard with new furniture because it was almost summer. And then I thought to myself, oh, it'll be so cool if we could have the gazebo and outdoor dining and stuff. So I furnished that out of my own credit card because I know that the auditor would never approve that kind of purchase. Also, I charge a lot of stuff, like for the kids, like clothes, toys.

[Unknown Expert]

See any commonalities among those three purchases that got you into 20k of credit card debt? No, no. Let me summarize the ones you told me. Taylor Swift floor tickets, furniture for the backyard, and stuff for your kids. Any similarities?

[Devin]

No.

[Clara]

Okay.

[Devin]

I. I don't know, Devin.

[Clara]

I think she might be low key, a bit of an addict, shopaholic.

[Devin]

I also work hard and I would love to feel the fruit of, you know, what I work hard for. And to ask somebody permission to spend $2, that just I feel is very disempowering. It's like I'm a kid again and I'm asking for somebody who has authority over me if I could spend this. And I don't feel good about that.

[Unknown Expert]

Yeah. How have you resolved this at all? You talk about it.

[Devin]

So when I couldn't pay back all my credit card already on time, Then it started piling up, and it was harder for me to get caught up with the payment. At first, I was doing the typical thing, oh, I'm not going to open my mail. I'm just going to ignore it, blah, blah, blah. And then I was served a summon from the court. Somebody sued me, like one of those collection. I was like, okay, wow, this is a wake up call for me. I can't really be jeopardizing my family's finances for this. I don't want our wages being garnished. So that's when I started saying, okay, I'm going to open these mails, and then I'm going to learn how to get out of this debt. So I was able to renegotiate some of those debts. I was able to lower them down. And then I started talking to Devin about it and said, hey, I want to confront this problem and I want to start paying them off.

[Unknown Expert]

All right, okay, hold on. How much debt do you still have?

[Devin]

I still have about 9,000.

[Unknown Expert]

9,000? That's down from 20.

[Devin]

Yes. Yes.

[Unknown Expert]

Okay. And what's your plan to pay it off?

[Devin]

So I'm doing the payment plan every month. So I've been paying $200 for each of those cards.

[Unknown Expert]

Okay.

[Devin]

Yeah.

[Clara]

Okay. All right.

[Unknown Expert]

I'm sorry. It's hard for me to tell. Are you crying right now?

[Devin]

Yeah, I am. Because I feel very embarrassed about the situation that I got myself into. And the more that you ask questions about this and the more that I talk about it, I can see now that, okay, like, he's not a bad person after all. It's not just about him trying to control me. He actually has a point, because now I can see we're actually on the same page trying to achieve the same goal. We just have differing ways to communicate. But had I been more willing to see the goodness out of it, to give him the benefit of the doubt that he's coming from a good place, we would have probably made the huge improvement by now.

[Unknown Expert]

That's pretty moving. You want to tell him that directly?

[Devin]

Devin, thank you for being patient with me when I was very irresponsible. And I really appreciate you being on top of our finances because in a way, I'm also learning a lot from you. And it's amazing how you deal with so much self control in our finances.

[Clara]

I appreciate that. No, I appreciate that so much.

[Unknown Expert]

Sometimes just talking out loud helps you empathize with the other person. But when we're stuck in our own heads, we get entrenched. It's like we're digging a ditch that we are putting ourselves in. But when we just talk out loud sometimes. That's why therapists really help other trusted people. It can actually just naturally make us more empathetic. I'd like to look at your numbers. Okay. Assets are $811,000. Can you break this number down for me?

[Clara]

Yeah, sure. So we have our house. I think it's about 450. We also have another property in the Philippines, and now it's appraised at 250,000.

[Unknown Expert]

Okay.

[Clara]

And then we have the values of our cars.

[Unknown Expert]

How much total?

[Clara]

We got three cars. That's going to be like 25 plus 42 plus 7,000. So that's what, 74.

[Unknown Expert]

Okay. That's 774,000.

[Devin]

Did we put your collections?

[Clara]

No, I wouldn't say it would be that material. No way.

[Unknown Expert]

What's that?

[Clara]

I do some collecting, like, you can see in the background. I do some collecting with, like, cards, toys. It's a little bit of a hobby of mine. Little bit of a ROI there, and it's fun for me. So.

[Unknown Expert]

Oh, how much is your total collection of everything worth?

[Clara]

I wouldn't say again, like, maybe like, 5,000, 6,000.

[Unknown Expert]

Okay, so we're at like, 780, 30,000 short. Kind of surprising, right?

[Clara]

Yeah.

[Unknown Expert]

What do you say, Devin? Because, you know, you mentioned, like, this is your line of work a lot.

[Clara]

Yeah, I'd say that's kind of in line. I think we did a pretty good job. I think it could be worse as far as, you know, what we have as a total asset value. But just given the situation that we were in a couple years ago, and then with Clara not really having a great sense of just how to control finances, maybe set us back a little bit.

[Unknown Expert]

Yeah, I guess I'm talking about being $30,000 short in the asset value.

[Clara]

Yeah, that's. That's a little concerning.

[Devin]

You know what? We did this, like, 12 midnight after we put the kids to sleep. So I don't. Where do we get that other number from?

[Unknown Expert]

All right, well, you know what I'm gonna do? I'm gonna go ahead and change this.

[Clara]

Okay.

[Unknown Expert]

To 779. I personally think that's a bit generous for a couple of reasons. One is a Zillow price is not the price that you. You will get.

[Unknown Host]

Okay.

[Unknown Expert]

Even if you sold it for exactly what Zillow says, you're going to get tens of thousands of dollars less once you factor in transaction costs, moving costs, et cetera. The same is true for cars, although not to the same level, but there's a lot of transaction costs with selling, cleaning, et cetera. I think this is probably a little over, but let's leave it as is. All right, let's go down to the income. Claire, can you read off this combined gross monthly income?

[Devin]

It's 14,400.

[Unknown Expert]

And that means that the two of you make $172,800 per year combined. Did you know that? Good. That's really good to know your basic numbers. Remember, 50% of people don't even know their household income. So that's very good that you both know it. All right, let's look at the rest of the numbers. Devin, can you read off the word in bold and the full number next to it?

[Clara]

Right, so that's investments. That's including 401k, non retirement, all investments, $16,000 savings, nada, zero debt, student loans, credit card debt, mortgage, 477,000. The debt would be my student loan, her student loan to Carnos, all the credit card debt that she's racked up, the mortgage.

[Devin]

Two mortgages for the New Jersey property. We haven't paid that off yet. And then one is for the Philippines property.

[Unknown Expert]

So that's it. That's your $477,000 of debt, total net.

[Clara]

Worth for a total net worth of 318,000.

[Unknown Expert]

All right, let's keep going. Investments are at 1%. Huh? I'm directing this at Devin, who has repeatedly told me he's in the finance world. Devin, can you explain this?

[Devin]

Yes.

[Clara]

Yeah, just given our situation, I just don't feel like we have that cushion that we have in order to go ahead and invest. So what little money I have, you know, some gambling and some more on the collection side.

[Unknown Expert]

What?

[Unknown Host]

What? What the. What did you just say?

[Unknown Expert]

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[Ramit Sethi]

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[Unknown Expert]

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[Ramit Sethi]

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[Clara]

What little money I have to, you know, some gambling and some more on the collection side.

[Unknown Expert]

What? What?

[Unknown Host]

What the. What'd you just say?

[Clara]

Yeah, you heard me. I had a feeling you're gonna be disappointed. I didn't really see a big enough cushion for me to go ahead and invest, so I've resulted the other avenues of trying to. You gave me $50. I'll try to go ahead and double that, triple that.

[Unknown Expert]

Gambling? On what?

[Devin]

Sports betting?

[Unknown Expert]

Is this a joke?

[Unknown Host]

Hang on a second. The numbers guy has their finances set up to contribute only 1% to investments, so he can gamble. And it's not even gambling for fun. It's gambling to make money. What is happening right now? At first, I was led to believe that Clara's overspending is the real issue, but the deeper I go, the more surprising this story gets. Honestly, this gambling thing is blowing my mind. I'm literally sweating. And it's a good reminder that seeing someone's numbers on paper does not tell you the real story.

[Devin]

No, please, Herbie, speak sense to him. I keep telling him so. When I started reading your book, I started doing the 401k. I started. So that 16,000 number is mine. But I keep telling him, put some percentage of your paycheck, even though it's a little to your 401k.

[Unknown Expert]

Can I just be really blunt with you, Clara? No advice you ever give him about money, at least not right now, he's not going to receive it because do you know how he sees you with money?

[Devin]

Yeah, unfortunately.

[Unknown Expert]

So the two of you have co created a dynamic where you, Clara, are the irresponsible one, the one who needs to be saved. And he is the one on the pedestal, the one who works in finance. But then it turns out, Devin, you're gambling because you believe you don't have enough money. So it's a little disingenuous. Suddenly, after hearing you tell me over and over, oh, I'm in finance and I'm responsible. And then it turns out you're gambling on what?

[Unknown Host]

Sports. Does it work?

[Unknown Expert]

I'll answer my own question. The answer is no, it doesn't work. And you got $5,000 worth of baseball cards while you're telling your wife, like, what's up with this Starbucks?

[Devin]

Thank you, Ramit.

[Unknown Expert]

Clara, this is not just him. You dropped $4,600 on one seat. When you don't have the money, then you're here claiming, oh, I want a buffer And I want savings. No you don't, because I'm looking at the next row, which is savings and it says zero. And you have three kids under the age of four.

[Clara]

That's correct.

[Devin]

That's correct.

[Unknown Expert]

Therefore you always feeling behind your feelings are based on total inaccurate understanding of money. It just doesn't make any sense. That's why we have to both master our money psychology and know our numbers. Okay, let's keep going down your numbers. Looking now at your fixed costs, Devin, what is this number here?

[Clara]

74%.

[Unknown Expert]

Your fixed costs are high. Did you know that you're spending a lot, probably too much on your fixed costs? Clara?

[Devin]

I just really learned that when we did the conscious spending plan, we would probably spend a hundred dollars like eating out.

[Clara]

How often do you eat out in one week? A lot. Because we both work and we don't.

[Devin]

Bring lunch to work.

[Clara]

We don't bring lunch to work.

[Unknown Expert]

So that's five times plus. What else?

[Clara]

Sometimes I sneak in a breakfast, you know, when I drop off the kiddo.

[Unknown Expert]

Let's say that happens what, four times a week?

[Clara]

Yeah, four times a week. Yeah. That's good.

[Unknown Expert]

Nine. What else?

[Clara]

And then Clara goes ahead and she sneaks in some breakfast there. Cause her commute is painful because it's New Jersey, New York.

[Unknown Expert]

Four times as well. That's 13. What else? Dinners.

[Clara]

Yeah, dinners. When we, when we come back. Yeah, we usually like split a meal. So that's maybe like three or four times.

[Unknown Expert]

Okay, that's probably like five times. So that's 18. And then coffee, things like that.

[Clara]

Yeah, pretty much every day. Both. Yeah. Excluding the weekends. We, we sleep in, we play with the kids on weekends. We kind of like tone it down on the weekends.

[Unknown Expert]

28, 30 times. You eat out 30 times a month? At least every day.

[Devin]

Yeah.

[Unknown Expert]

What do you think about that?

[Clara]

Yeah. That's not necessary.

[Devin]

That's not necessary. That's too much.

[Unknown Expert]

Are we ready to get honest with each other?

[Clara]

Yes.

[Unknown Expert]

You have thousands of dollars of credit card debt, you have almost no investments, you have zero savings and you're spending thousands of dollars a month on guilt free spending. Devin, how, as the money person in this relationship, how did you let this happen?

[Clara]

Just having that serious conversation with my wife. And instead of maybe just breathing down her neck, try to go ahead and engage her a little bit more. What, what's going on? And try to teach her even though every kind of exhausted because she just doesn't get it.

[Unknown Expert]

How accurate would it be for me to say, Devin, you don't know what to do. To fix it. So you text your wife about every little $5 expense that she has because that gives you a small, temporary sense of control.

[Clara]

How I communicate, I know it can be better.

[Unknown Expert]

Obviously, the way I see it, the risk is off the charts here. The two of you were married with no kids. I would be alarmed because one of you could lose your job. Especially now. You would have a week that you'd be able to coast, and then it would all begin falling down. With three kids, this is 10 out of 10 risk. 10 out of 10, what would be the chances of one of you getting laid off in the next 12 months?

[Devin]

High possibility.

[Clara]

I'm a glass half full kind of guy. We're in America, baby. Get to work.

[Unknown Expert]

What the. I'm a glass half full too. And what they say, Trust in God, but lock your car.

[Unknown Host]

Right?

[Unknown Expert]

Be optimistic, but have a big fat savings account just in case.

[Devin]

Yeah.

[Unknown Expert]

Have you guys ever experienced poverty?

[Devin]

Yes. I grew up in a very not privileged household. We were struggling every day, and I always felt like it's not something someone has control over. One day my parents have money, we're fine, they're not fighting, and then the next day, oops, we don't have money. What do we do? It's hard for us to figure out what we're going to eat for the next meal. Or there's so much insecurity in terms of how do I get to school.

[Unknown Expert]

Isn't that happening in your relationship right now? Clara, you wrote there is a lot of yelling, which is unhealthy for our little ones to witness. How much are you willing to change in order for them to not go through that same experience?

[Devin]

Well, I'm willing to do whatever it takes.

[Unknown Expert]

Because right now they are growing up in that similar to how you grew up. They're growing up the same way.

[Devin]

That's scary.

[Unknown Expert]

Devin, what about you? Where'd you grow up with money? And what do you remember your family saying about it?

[Clara]

Yeah, it was definitely a struggle. My mom was separated from my dad, so it was just herself and us two boys, me and my brother. So I definitely knew how important money was because it was always a little tight. But I also celebrate when you have money available.

[Unknown Expert]

When the two of you got together, when was the first time you seriously talked about money?

[Devin]

Only when I got pregnant.

[Unknown Expert]

That's an honest answer. That's pretty much how most Americans talk about money. So you talked about it then?

[Devin]

Yes.

[Unknown Expert]

What was that conversation or conversations like?

[Devin]

It was bad. I almost started contemplating, what if I just do it by Myself because I don't want to have to deal with this my whole life. I don't want to try to explain every purchase that I make. And I started contemplating of it's probably better if we're not together because I just can't handle this type of dynamics anymore.

[Unknown Expert]

Did you tell him that?

[Devin]

I think so.

[Unknown Expert]

Evan, what was your reaction?

[Clara]

I held strong. I tried to tell her, look at the bright side, I can go ahead and handle it. You have to trust me on this. I can do this.

[Unknown Expert]

Let me just reiterate what I just heard. She said, I thought about separating or doing this on my own because I didn't want to be looked over my shoulder for the rest of my life. Question. Your response was, I held strong. I told her to look on the bright side. And then I took over the money stuff.

[Clara]

Well, we're still here, still alive. I'm still above the water, haven't drowned yet.

[Unknown Expert]

How come so many men always reassure their wives like, it's fine, it's fine. Like, I'll do it. And then they actually don't do a good job managing the money.

[Unknown Host]

This is a classic example of what I call the ignorant reassurer. Devin doesn't actually know how to manage their personal finances, but he thinks it's his job to keep Clara calm. Men do this all the time. For example, when she panics, he jumps in with, don't worry, I've got it. But he doesn't got it. He's gambling, he's not investing, and they have $0 in savings. This dynamic might sound familiar because it happens so often on this show. One partner gets anxious, the other steps in with reassurance, it's going to be fine instead of a real plan. And very often I mentioned that men do this. Men often have absorbed the message that their job is to keep their partner calm, to be the provider, to make sure that things are running. But often when I ask them, do you even know how money works? They will finally admit, no, wait. How can you reassure someone when you don't even know what's going on? It feels comforting, but it's not. Because while one person is anxious and the other one is playing the hero, nobody's actually doing the work of creating a plan. So basically, two people are running in place, becoming more and more exhausted, but neither of them is actually moving anywhere. If one of you is constantly reassuring the other, you might be embedded in this money dynamic.

[Unknown Expert]

Do you have financial goals?

[Devin]

Definitely.

[Clara]

Yeah, of course.

[Unknown Expert]

Oh, you do.

[Unknown Host]

What are they getting?

[Clara]

Other streams of income, saving more out of debt. Those are really kind of the goals that I would highlight right now that are just on my plate. That can easily be achievable by the end of this year for sure.

[Unknown Expert]

And Clara?

[Devin]

Yeah, it's the same thing that Devin just mentioned. And I've been really encouraging him to contribute to his retirement savings because he's not like a believer of that. But I've been telling him that, hey, you know, one day we're gonna be old and what do we do? What's our backup plan? It's not like we want our kids to support us. We don't want to put that burden on them. So I keep convincing him this is important. Ramit says that, you know, you should be paying your future self and this is the way you pay your future self.

[Unknown Expert]

Hey, Clara, he's not a believer in what?

[Devin]

In retirement savings. He's like, this money that we make now, we spend now.

[Unknown Host]

Earlier this year I did a six city tour for my new book and this took a lot of planning. We had to coordinate with each venue, coordinate with local bookstores, book show openers, manage travel for my entire production team. We had to track guest lists in every city and on and on. How did we keep track of all of these moving parts? My event manager used Notion, this episode's sponsor. Here's what he told me. We used Notion as our central hub for the tour. All of the crew and production team could access important details of the tour in one place, even as it was updated multiple times per day. I really like that. Teammates can jump in and leave comments and update tasks independently. With Notion, everything is in one place. Clean, simple, easy to use. And now with Notion AI built right in, it's even more powerful. Enterprise search can pull answers from tools like email, Jira, even PDFs, research mode, writes full reports in minutes and meeting notes, captures and summarizes everything so key decisions don't get lost. No more bouncing between apps, no more guessing where things live. Just one system that keeps things moving. That's why more than half of Fortune 500 companies use Notion. Try Notion AI, the best AI tool for work by going to notion.com ramit that's all lowercase n O-T-I-O-N.com r a m I t notion.com ramit I just got back from the gym where I work out with a trainer. They handle my training, nutrition, even when I travel. But notice one thing, they charge me a flat fee. Would I ever pay my trainer a percentage of my assets? No, that would make no sense. Would you ever pay your gardener a percentage of your assets? Of course not. You pay them a flat fee. So why do so many people pay their financial advisors 1%? There is a better way. If you're looking for a financial advisor, use a flat fee. That's why I've partnered with Facet, a service that offers affordable, accessible financial planning. With Facet, you get flexible access to a team of financial planners and a team of professionals providing guidance across retirement planning, tax strategy, estate planning and more. And instead of taking a percentage of your portfolio, there's an affordable flat membership fee. But if you are getting closer to retirement or you have a complex portfolio, or you just want a second set of eyes on your specific financial plan, then I highly recommend you check out FASST. You can book a free [e-mail] Ramit speak to them and decide if it makes sense for you. Check out their membership [e-mail] Ramit Again facet.com Ramit F A C E T Sponsored by Facet, Facet Wealth Inc. Facet is an SEC registered investment advisor headquartered in Baltimore, Maryland. This is not an offer to sell securities or investment financial, legal or tax advice. Past performance is not a guarantee of future performance. Terms and conditions apply.

[Unknown Expert]

He's not a believer in what?

[Devin]

In retirement savings. He's like this money that we make now, we spend now.

[Unknown Expert]

Devin, what is your occupation? You mentioned being in the financial world.

[Clara]

Yeah, I'm a senior tax associate.

[Unknown Expert]

Okay, you're senior tax associate who does not believe in retirement planning? Okay, explain it to me.

[Clara]

I'm sort of a believer of get the money, spend the money now, or try to see what you can go ahead and achieve with that money and maybe go ahead and throw it in somewhere else. Just try to get a quick return. As far as retiring, like when I'm 60, 70, luckily by then I'm just going off the hunch that I'm gonna make it big. I sort of like betting on myself and yeah, I should be okay.

[Unknown Expert]

Can I be really candid? Your bet on yourself has not paid off.

[Clara]

Yeah, it's not going the way I want it to. Yeah. Notice that. Yeah.

[Unknown Expert]

What does that tell you?

[Clara]

Tells me that I'm doing something wrong and that I should really consider retirement savings for my future self. Of course. Even if it means cutting the gambling, collecting things that I think can make me a couple quick bucks here and there. But in the long run, it's not going to be there when I hit 65 or the retirement age.

[Unknown Expert]

I think that was a good answer, but I don't think you really believe that.

[Clara]

Yeah, right. I may need to get out of my own ways and I need to really focus on how important it is and open a book, pretty much. I think that's what I need.

[Unknown Expert]

You haven't read my latest book, right? Money for Couples.

[Clara]

I believe my wife wanted to read it together and I was busy doing something else, which was probably watching the game, to be completely honest.

[Unknown Expert]

I appreciate the honesty. I don't. I don't think you two actually have financial goals. I don't believe you. Most couples don't have financial goals. Financial goals, just a weird word that people throw around of what they are supposed to have. You have no goals. I could see it. Your CSP shows me no financial goals. The only goals I see is that you like to buy cars. Yeah, that's it. That's the only thing that shows up for me on your CSP that I can immediately identify. You don't have financial goals. The words you use are words that you think you should be saying. I don't see anything about retirement. Because at least one of you doesn't believe it. Had you read the book your wife asked you to read, you would have recognized yourself as the dreamer. Now, I got to tell you, I don't get a chance to talk to a lot of dreamers. Dreamers don't come on this show. You know what a dreamer is?

[Clara]

Please, indulge me.

[Unknown Expert]

A dreamer always believes that success is right around the corner. It's one of the four money types in Money for Couples. They believe that the next deal, the next gig, the next collecting item or.

[Ramit Sethi]

Bet will pay off big.

[Unknown Expert]

They also believe that consistent investing is almost for suckers. They even have phrases like that's a 9 to 5 for those poor suckers. I don't need all that. Right. I'm going to hit it big. I'm betting on myself. I need you to believe in me. How much of this sounds familiar, Devin?

[Clara]

Pretty close to accurate.

[Unknown Expert]

Yeah, that's a dreamer.

[Clara]

Yeah. Yeah.

[Unknown Expert]

What I write at the end of that section is being the partner of a dreamer is the most difficult of all because they do not really exist in a reality. The reality that they've concocted around themselves is usually only possible because they are subsidized by someone else, subsidized by their parents, subsidized by their spouse's income, subsidized so they can afford to live this la la land world. In a matter of weeks, your financial situation would deteriorate to like life threatening. It would become very bad very fast. I also bet you wouldn't be gambling if you didn't have this subsidy. I bet you would probably look for another job real fast. I bet you would read a personal finance book real fast.

[Clara]

Yeah, that's 100% accurate. Yeah. It's a position that I'm in. This difficulty of paying off the credit card when it's like overreaching. 10,000 plus every month. It's the difficulty of just trying to communicate and help someone like my wife understand how big of a pickle this Gambia, how fast it can really go really bad. I wasn't really fond of gambling like three, four, five years ago. I was going ahead and trying to make a quick buck getting collectibles and getting toys or anything like that. It's just the position that I'm in with Clara and then trying to see where we can go and taking the right step forward to make sure we get out of this funk.

[Unknown Expert]

No, that's not true. You said I wasn't a fan of gambling. I've only kind of been thrust into that because my wife's irresponsible spending.

[Unknown Host]

Okay, I agree.

[Unknown Expert]

Your wife has had irresponsible spending. Clara. There's no way you could have afforded $4,000 on a freaking concert seat.

[Ramit Sethi]

There's no way.

[Unknown Expert]

And you're paying for it. You'll end up paying probably $10,000 for that seat with interest. But look at this, Devin. If you had been this long term thinker, you would have more than $16,000 in your investment account. Where's the money?

[Clara]

Me and my wife are a big fan of doing all kinds of renovations at our house just to make it a very nice.

[Unknown Expert]

Oh, what a surprise.

[Clara]

Yeah. So. Yeah.

[Unknown Expert]

So how much you spend on renovations total?

[Clara]

I think since we got the house in 2021, I have a record of it, like 80 grand.

[Unknown Expert]

80 grand?

[Clara]

Yeah.

[Unknown Expert]

With three kids and zero savings, the only way for you to move forward is to actually take a hard look in the mirror and be honest about what is going on in this dynamic. Like each of you has kind of portrayed yourself as either a victim of your circumstances or. I know I messed up in the past, okay. I'm ready to change now. The victim of circumstances, Devin, is I'm only doing this gambling because my wife is so irresponsible with her.

[Ramit Sethi]

I've tried everything.

[Unknown Expert]

Have you tried reading a book?

[Clara]

No, don't have the time. Should make the time.

[Unknown Expert]

You have the time. I can't believe I, as a guy who doesn't even have kids. And telling a parent of three, you have the time. You have the time. If you have $0 in savings and three kids, you have the time. Get the audiobook, listen to it on the way to work. Whatever. I'm not here to micromanage. You have the time then, Clara, you're saying, like, I know I made mistakes, but I'm ready to change.

[Devin]

Yeah.

[Unknown Expert]

What are you ready to change?

[Devin]

I really would love to start saving for our kids an account where we can set aside money for their activities, which I've always told Devin, like, hey, let's enroll this kid to swimming. Let's enroll this kid to soccer. But then Devin would always say, no, we don't have budget for that. That's another hundred, two hundred a month. And that's something that I would really love to set aside money for.

[Unknown Expert]

How is your first answer about spending money on kids activities?

[Devin]

How?

[Unknown Expert]

I mean, have we not been talking about how you have zero savings?

[Devin]

Yeah.

[Unknown Expert]

And your first response is, I want to spend money on my kids.

[Clara]

Gotcha.

[Unknown Expert]

This isn't a back and forth, Devon. It's not about one person being right or wrong. You're both. Put yourself in this situation. Until you start looking at yourselves as a team, you're constantly going to have a tug of war going on which results in exactly this. I want to do this. No, that's not going to work. And we just stay paralyzed. And by the way, end up spending all of our money anyway on cars and renovations and all the typical stuff that Americans spend their money on and then go, where did it all go?

[Unknown Host]

Where did it go?

[Unknown Expert]

It went to your house and your driveway.

[Unknown Host]

Honestly, looking back at this, I was getting visibly frustrated and I regret that. You know, my job is to stay calm, and I want to be able to connect with each couple that comes on this show. What was going through my mind was frustration at how both of them are so entrenched in their money dynamic that they've created a reality where they're the ones being wronged. Clara feels like Devin controls her, so as a reaction, she racks up debt. Devin uses gambling as a way to get rich quick. And both of them literally believe they're the ones being wronged. It's like, I don't have a choice. You made me do it. This happened to us. No, you chose this. Sometimes I think we go out of our way to account for all the reasons someone might be acting in a peculiar way. Structural reasons, childhood cultural messages, gender. That we forget about personal responsibility. Not on this show. I believe you can simultaneously acknowledge the need for systemic reform and, and take personal responsibility. And candidly, they both need to take that personal responsibility right now. If they continue pointing fingers at each other, they'll just keep going along this path. Can you imagine doing this for decades in your relationship? What do you think happens? The reason that I was getting so heated is I'm not okay with pointing fingers if you're not going to make changes. Especially when I see how quickly they can make a change if they choose to.

[Unknown Expert]

So, Clara, what are you willing to change and how can your first answer be, I want to spend money on my kids.

[Devin]

Okay. Now that I think about it, what I'm willing to change is the way we spend money.

[Unknown Expert]

Be specific.

[Devin]

Yeah. So, you know, now that we're dissecting our habits, it should all start with us cutting on what we spend and prioritizing saving. Because it sounds ridiculous that we had $80,000 for renovation, but we have zero savings.

[Unknown Expert]

Okay, Devin, what do you need, financially speaking?

[Clara]

Financially speaking, what we need is a savings account. We definitely need to go ahead and save for any kind of things that can go wrong.

[Unknown Expert]

Why?

[Clara]

Because if things go wrong, getting furloughed or getting laid off and we don't have any savings, then it's going to be a pretty steep hill to go ahead and try to see if we can bounce back.

[Unknown Expert]

You know, part of living a rich life is making decisions before the world forces you to make them.

[Clara]

Yeah.

[Unknown Expert]

I'm going to put it up on screen, your conscious spending plan, and you two tell me as a team what you would like to change.

[Clara]

Okay, let's do the car. That's what me and Clara really want to tackle first. Because one of the car payments there is ridiculous. Like $1,300.

[Unknown Expert]

You have a $1300 car payment?

[Clara]

Yeah, that's my bet. That's my bet.

[Unknown Expert]

What was the thinking behind it?

[Clara]

The thinking behind it was when I got this car in 2024, it was pretty much get the three row. Because we have three kids now, we can't really have a very comfortable sort of ride if we're going to go ahead and take the kids a trip or anything like that with just a two row car.

[Unknown Expert]

What the is going on right now? I know we need a thirteen hundred dollar car payment.

[Unknown Host]

So we have a comfortable.

[Unknown Expert]

Meanwhile, we have zero in savings. What is happening right now?

[Unknown Host]

You know, when I started my blog, I had no clue what it would eventually become. Yes, I wanted to grow it, but I was also a college student running a blog for free out of my college dorm room. That's why years later, I made a rule for myself. If my blog earned the same amount as my day job for three months in a row, I would consider going full time. Well, it took a while, but eventually it happened and I'm so glad it did. Starting a business totally changed my life. And if becoming an entrepreneur is your dream, you can get started faster with this episode's sponsor, Shopify. Shopify is the commerce platform behind millions of businesses around the world, including household brands like Mattel and Gymshark. They help you handle anything from website design, managing inventory, customer service, global shipping, all in one place. And if you're looking to grow your business internationally, Shopify has global selling tools. If you sell more in person, Shopify's award winning point of sale connects your online and offline sales all in one place. With 99.99% uptime and the best converting checkout on the planet, you'll never miss a sale again. Only with Shopify. Get all the big stuff for your small business right with Shopify. Sign up for your $1 per month trial and start selling today at shopify.com ramit go to shopify.com ramit shopify.com ramit.

[Clara]

We have three kids now. We can't really have a very comfortable sort of ride if we're gonna go ahead and take the kids to a trip or anything like that with just a two row car.

[Unknown Expert]

What the is going on right now? I know we need a thirteen hundred dollar car payment so we have a comfortable. Meanwhile we have zero in savings. What is happening right now?

[Clara]

I think I get too comfortable seeing how me and my wife did work hard to get to the jobs that we are right now. And we can always go a little bit more north and we can have.

[Unknown Expert]

The way you're spending is like you make $450,000 a year.

[Clara]

Exactly.

[Unknown Expert]

Back to the CSP. Tell me what you want to change. You want to sell one car?

[Clara]

Yeah.

[Unknown Expert]

You're not going to trade it and I'm going to tell you that right now. These car dealers are not your friends. They're not going to make a deal unless they're benefiting. So we're not doing a trade. And you don't need three cars.

[Clara]

Right.

[Unknown Expert]

Which car are you going to sell and how much are you going to make or lose?

[Clara]

Right. So there's this one car that's completely paid off. It's the car that I've been driving since high school to the Jeep that's going to probably be like around 7,000.

[Unknown Expert]

What? What year Jeep is this?

[Clara]

A 2004.

[Unknown Expert]

You think you're going to get $7,000 for a 2004 Jeep?

[Clara]

I kept it in pretty good condition, so I'm hoping there that's kind of estimate.

[Unknown Expert]

2004 Jeep Wrangler.

[Clara]

Yeah.

[Unknown Expert]

Have you looked online to see what the prices are?

[Clara]

Yeah, I believe the market is around there. Seven, six.

[Unknown Expert]

Okay, you're right. I stand corrected. Let's post it up. Seven thousand.

[Clara]

Yeah.

[Unknown Expert]

All right. Damn. You kept it in good condition. 7,000. All right, 7,000 bucks. What are you going to do with the money?

[Clara]

So I'm putting that all on the big car note, which is the EV car. And then when I get the tax refund, just bring in much. Just bring it down, try to get rid of it.

[Unknown Expert]

What's the interest rate on your ev?

[Clara]

It's a zero.

[Unknown Expert]

I would take that money and put it in savings.

[Clara]

The 7K?

[Unknown Expert]

Yes.

[Clara]

That I can get from my car. Okay.

[Unknown Expert]

Yes. Got it straight up into savings. There's no reason to pay off a zero percent loan. Okay, great. So 7,000 bucks. That is amazing. We have $7,000, let's just say in a savings account. Great. Clara, it's your turn. What do you want to change?

[Devin]

I'd like to change that mortgage. It's 2,900.

[Clara]

The breakdown for the New Jersey property is 1700. The breakdown for Philippine building is 1200.

[Devin]

But our goal is starting in August. That property in the Philippines would start like paying off by itself because we would rent it out.

[Unknown Expert]

Okay, how come you haven't rented it already? Out of curiosity.

[Devin]

We bought it like on a pre sell. So they're still building it and it's going to be finished by August.

[Unknown Expert]

So you're hoping that it covers the mortgage. Is that realistic? Have you looked at rents around there?

[Devin]

Yes. So they're big on short term rental. Airbnb. So we can put it up for like $200 a day.

[Unknown Expert]

How realistic is it? Just so I know, like you're planning to finish it in August and then rent it out. Is there anything that could go wrong here? Because I like to be conservative when I plan.

[Devin]

Our goal is for just at least to make a thousand two hundred a month from that. So that'll be like a week of being rented out. That's our goal. Just so that we don't have to include that in our fixed costs. Then that would drastically lower down our mortgage. And then if we get rid of the two cars then now we have lower fixed costs and Then now we have more room for savings.

[Unknown Expert]

Okay, can we talk about the two cars? Because I heard one car you want to get rid of. Now there's two.

[Clara]

Yeah. So the second one we want to get rid of, which is the EV is 1300.

[Unknown Expert]

What is the car that you're paying? 1300 on the three row. What brand?

[Clara]

Kia.

[Unknown Expert]

Kia. And if you sell it now, you're going to lose money. How much are you going to lose?

[Clara]

10 grand.

[Unknown Expert]

So if you sell it, you're going to lose $10,000. Where's the $10,000 coming from?

[Clara]

I thought when I sell the Jeep to 7,000 and then we have a pretty generous amount of tax refund coming in so it can come from there much. We're talking about like eight grand.

[Unknown Expert]

Eight grand.

[Clara]

Yeah.

[Unknown Expert]

One thing I want to point out, it's great. I want those cars gone. Fantastic. But everything you've just told me is these one off kind of like free money things. And this is very, very typical of dreamers. They treat this stuff like we live in a barter economy. Hey, I'll trade you some spices. No, we need to focus on consistently what is being changed. Living a rich life is about focusing on what's going to happen every single month consistently. Devin, if your strategies were going to work, they would have worked.

[Unknown Host]

Okay, this is a very difficult conversation. I don't know if I showed up my best here, but I can especially tell how challenging this is for Clara and Devin. You know, after talking to tons of people about money, I've become a lot more compassionate. I see it in my own life. I used to have this bonsai tree. I bought it because one day I dream about buying a 6 foot, 500 year old bonsai tree for my apartment. Anyway, I decided to start with a cheap one. Learn how to take care of it. So I had it on my bookshelf. You probably saw it in previous videos, but I never opened up a single webpage on how to properly take care of it. My wife noticed it and she bought me this tiny little book on how to take care of your bonsai. Guess what? I never even opened the book. And I actually loved that. Bonsai. No, I say loved in past tense because little bonsai tree eventually died. See, it's not in my background anymore. That's just an example of how someone can be extremely disciplined in one part of life and then not follow through in another. And if it happens to me, it happens to you. And it's happening to Clara and Devin right now. Guys, you and I do the same Thing we don't plan properly for taxes or life insurance or college costs or we wait until we absolutely have to make a change in our relationship. This is so common. We do this with our health, we do this with our relationships. We do this with changing the oil in our car. We're not robots. Sometimes we say we want one thing and we genuinely want it, but we do the opposite. I share that because with Clara and Devin, I think it's helpful to zoom out and get just a little bit of perspective. It would be very easy to judge them for sharing their story. But before you do, please ask yourself this. What am I currently kicking down the road right now because I don't want to deal with it? You might be surprised at how many answers you come up with. I know I've come up with a few that I'm doing right now. Coming up. Everything shifts when we talk about solutions, what they should do, and I can guarantee it's not what you're expecting.

[Unknown Expert]

I don't get a chance to talk to a dreamer a lot. And usually for dreamers it does not end well. They end up in a really bad situation, personally and financially. And it's actually tragic for their families as well. I don't want that to happen. You guys have three little kids, but you cannot seem to stop chasing some magical solution instead of making direct changes. I'll tell you what I would do. If it's me, I would get rid of one or both cars. Okay.

[Clara]

Okay.

[Unknown Expert]

Then I would take a hard look at my spending and I would be extremely lethal with this spending. $200 in subscriptions. Not anymore. Our family doesn't have money for that. That's going down to 50 at the max. That's it. Phone. I would be looking for cheaper options.

[Unknown Host]

Clothes.

[Unknown Expert]

Okay. Not going to happen. Not anymore. Groceries seem quite reasonable for a family. Honestly, I don't have any changes on that. Debt payments. I would be taking a hard look at how much I am paying. What is our debt payoff plan? Do we actually know how much interest is being charged? Are we paying the right amount? Then I go down to my guilt free spending, which indicates you spend $2,800 a month. I don't believe that number, do you?

[Clara]

Yeah, I'm not that entirely sure, to be honest.

[Unknown Expert]

Okay, so you probably spend more than that. Clara, can I ask you, would you be willing to take on more of a leadership role with money in your financial relationship?

[Devin]

Yes, of course.

[Clara]

Okay.

[Unknown Expert]

Then I'm putting up to CSP and I want you to tell me what you would do. Go ahead, be specific. Tell me the numbers to change.

[Devin]

Yeah. So for subscription, $50.

[Clara]

Okay.

[Devin]

For a phone, I would like that to be just $100.

[Clara]

Okay.

[Devin]

No more clothes. Like, we can just ask our friends. Hand me downs for groceries. We want that to be just 500.

[Unknown Expert]

Okay, fine.

[Devin]

For debt payments, I would like that to go down to just $400.

[Unknown Expert]

Why?

[Devin]

We're negotiating the terms with this collection company and see if I could give them lower payments monthly.

[Unknown Expert]

Okay, fine. 400. You're down to 67% fixed costs.

[Devin]

Yeah.

[Unknown Expert]

Your car payment's going to go down, correct?

[Devin]

Yeah. For the car, we just wanted to stay at 500. That's it.

[Unknown Expert]

I'm putting it at 800 because you're still going to have a bunch of other expenses with your car you didn't think about, but you're now down to 59%. I think that's a little optimistic, but it's way better than what it was. Do you see how fast that happened?

[Devin]

Yeah. Wow.

[Unknown Expert]

What. What just changed for you to be able to make that change that fast?

[Devin]

Just realizing that we are not doing great in terms of handling our finances, that we have to do better.

[Unknown Expert]

You guys are at a 10 out of 10 danger level.

[Devin]

Yeah.

[Unknown Expert]

And there's too much talking. What about this?

[Unknown Host]

What about that?

[Unknown Expert]

No. Guys, if, like, one of your kids got sick, how quickly would you turn on a dime and change everything in your life to help your kid? It's instant.

[Clara]

Oh, immediately.

[Unknown Expert]

Immediately everything would change. If one of you needs to quit, you would quit. You would figure it out. That's the urgency I want with this money. Like, and the fact is, you just did it, Claire. But you did it because you decided. I'm not going to wait for Devin to figure this out. In fact, why has Devin become the money person in this relationship? He's gambling. When I talk about recalibrating your entire relationship with money, I mean all of it. Who's the one leading the money? Probably it needs to switch. You both need to be involved, but probably it needs to switch. I sense more urgency from you than from Devin. So next up, I want to ask you about this. Clara. You currently have almost $4,000 left over at the end of the month. What do you want to do with that money?

[Devin]

I would definitely put a majority of that in the savings. Like 3500.

[Unknown Expert]

Okay, fine.

[Devin]

My goal, really is to up my 401k contribution, and I would love my husband to also do the same. And no more money going to DraftKings or sports betting. I want him to really up his game in planning for his retirement.

[Clara]

Why?

[Unknown Expert]

Tell him why.

[Devin]

Because one day you're going to be old and you're not going to be able to work. And it's unfair for the children, our kids that we're raising to be independent individuals to take on that responsibility. And if I prepared for my retirement, it's not fair to me to use that for you as well. Right? You should be able to have your own retirement savings.

[Unknown Expert]

Okay, now ask him if he heard you. And what did he hear?

[Devin]

Devin, did you hear me?

[Clara]

Yeah.

[Devin]

Okay, what did you hear?

[Clara]

Yeah, totally. I think I need to change how I look at retirement and save for my own retirement. Because, you know, obviously you wouldn't want that burden on our case, on yourself, and start immediately. That's not a problem. So that it doesn't become an issue when I get to be the age to retire.

[Unknown Expert]

Okay, good. I like that. A couple of phrases that I might recommend you use is here's what I need. And each of you can say this, here's what I need. It could be we're talking finances. Couples talk about this in terms of around the house and emotionally, but I'm talking about financially. I need us to save $3,000 per month. Okay, that's what I need. And then the other partner might say, hey, well, look, where did that 3,000 come from? What if it means we can't send our kids to swim class? You know, it's a back and forth. That's how we talk about money. Another thing is here's what I expect. I expect you to do X. It's not like, oh, please, I gotta show you 10 reasons why retirement's important. No, this is what I expect. I expect my partner contributes to their retirement at least $1,000 per month. Whatever the number is, this is what I expect. We're adults. That's what we do. We're teammates. I will say that with the amount you make, you could be debt free 100%. You could live a very nice life. I totally see that. But you would have to make some huge changes first. You would have to recalibrate the way you talk about money. Both of you would have to really examine what role you currently play. And right now, there's a bit of parent child in here. Devin is the parent, Claire's the child. But it's very unclear why that's even happening. Because, Devin, you're not particularly skilled at managing money. And Clara, you've given up your power. And part of it, there's a reason for it. You know, you got into a lot of debt and were very irresponsible with money. But the fact is, we have to focus on where we are today and where we're going. I believe people can change totally. That's why I do what I do. The two of you would have to come up with a vision of what you want for your family. In our family, we always save at least 10%. In our family, we have a target of 12 months of an emergency fund. In our family, we eat out once a week, and it's a big special occasion where we look forward to it, and we. That's what we eat out right now. Okay, you'd have to change the dynamic, and probably, Clara, you would have to take a much bigger role with money. Okay. Second, you'd have to make some very difficult and rapid decisions. The car stuff, it needs to go. The monthly expenses, that needs to change immediately. Eating out will probably be one of the hardest things you do because you eat out every day. And changing that, for most people, they have come to rely on it as a crutch in a way that they don't even understand. To change that will feel like you're cutting off your arm. And yet it probably has to happen. And I think you could make it happen. You could make it happen if you have a vision. We want our kids to be safe. We want to stop fighting about money. We actually want to rebuild our entire financial life. And that's going to require some sacrifices, but we can do it. We're strong together. Clara, I want to hear from you. I'm not saying you have to do all of that. I'm telling you what I would do if I wanted to get out from under this. But it's ultimately up to the two of you.

[Devin]

Well, right now, I'm still trying to process all of the information. You've clearly identified what's wrong with the way we spend, of the things that we prioritize and what we need to do urgently. And I agree with that. I really, really agree with that. I like the fact that you encourage me to step up because that's like me taking back my power of, hey, you know, we're actually co equals. You can respect me because we just have the same role in this. So that's exciting for me. That's something that I really look forward to moving forward. And at the same time, that is also giving me that kind of pressure to be really better, because I don't want to be stepping up and just, like, messing it up again. I really want to be a mature person, responsible and just be able to tell Devin in his face, hey, look like this is wrong. We're going back to that same old pattern that we said we're not going to go back into. And remember what we talked about that day with Ramit and we have to be back on track.

[Unknown Expert]

I love hearing all that. That's a very astute assessment of what we just covered. Can I ask one more question? What do you disagree with?

[Devin]

Maybe I disagree with when you mentioned once a month to eat out, like as a family. That's just a bit hard for us because our kids are being left with a nanny Monday to Fridays and we rarely see them. Our family time is to take them out and eat. I mean, instead of doing that every week, we could probably do twice a month. But I don't think we can decrease it to once a month because it's something that we value a lot and it's hard not to spend when you're outside.

[Unknown Expert]

Can I say if you wanted to go twice a month instead of once a month, that's fine. That's a difference of 1 versus 2 times times. I don't mind that. That's up to you as a family. I want to point out that you currently eat out over 30 times per month.

[Devin]

Yeah. No, really. I will do better in terms of meal prepping for our family.

[Unknown Expert]

Is it only you that's going to do better in terms of food for the family?

[Devin]

We're both going to start this weekend. We're going to do it together.

[Unknown Expert]

Oh, I like that. Evan, what do you say about that?

[Clara]

I agree. I think that'll be fun.

[Unknown Expert]

Nice. Okay. Devin, what about you? What do you think? Hearing my feedback, my observations, my reaction.

[Clara]

Is it was pretty shocking. I didn't know I had a classification as a dreamer. So that was like a wake up call. I also agree with you at how these dreamers act and how they feel like just banking on it every day, like, oh, something's just going to happen, everything. I'm just going to find money somewhere else, stuff like that. So that whole outlook, that whole Persona that I've taken on needs to change. I don't think there's anything I do disagree on, especially when it comes down to the cars. That's something that I wanted to get rid of and that I've been working towards too.

[Unknown Expert]

How about the baseball cards and the other collections?

[Clara]

I understand that you probably want me to get rid of it all, but I guess maybe, yeah, in that sense I'll disagree. That's what I'd like to do, you know, to go ahead and collect and try to see what's going to give me a profit in the next couple years. Kind of like my own little investment thing. But there's definitely some leeway in that and I can tone it down and not just go like bananas.

[Unknown Expert]

What do you think about that, Clara?

[Devin]

That's very great to hear. I rarely hear my husband admit something like that. I love it. I love that he's open and he's willing and that he's taken in the feedback.

[Unknown Expert]

I like that too. Now I'd like to ask both of you what surprised you about this conversation?

[Devin]

Clara, what surprised me is the fact that I. I wasn't being aware how irresponsible I am as a parent by not really identifying the urgency of the issue. Why are we so yolo with our lives? Like, you know, like, what if something happens? I don't want our kids to be traumatized like that. So this is a really great wake up call. And I love that we have this action plan in place. We've always worked together as a team really well when we have a common goal. Like, we love achieving things together. So I think that this is going to be great. This is going to be doable for us.

[Unknown Expert]

I love that. It's funny, sometimes we need permission from somebody we don't even know to do the thing that is right. And the best part of it is once you recognize that permission and then you start doing the thing, you realize I never actually needed permission the entire time. And that really opens up a lot of possibilities. Devin, what surprised you?

[Clara]

I thought this was going to be a very fluid, easy call. It was pretty tough. And I think that's good because it presents a sense of seriousness to the matter and realizing that I just can't be in this sense of control. It's tiring. It really is. I don't want to be yelling. I don't want to be fighting. So it's good now that Clara has like, a little more sense of authority with me and her together working as a team. I think it's going to turn out very smoothly. I'm really looking forward to getting started.

[Unknown Host]

I want to thank Clara and Devin for sharing so openly with me. This conversation was frustrating, it was challenging, but it was also honest. Clara and Devin came in with years of resentment and secrecy and even dysfunction around money. Yeah, I think they have a long way to go, but I think something shifted a little bit today. You saw Clara step into a leadership role. You saw Devin confront some hard truths, and by the end of our conversation, they started acting like a team. Now, is that enough to undo years of bad habits? Honestly, probably not. In one conversation. It's very difficult, almost impossible to change a lifetime of habits. But sometimes to run a marathon, we have to take the first step. Unfortunately, I never heard back from them. My team reached out several times to Clara and Devin because we genuinely want the best from them and we want to hear their follow ups. But they never replied. And that's hard for me. I spend hours and hours with the couples on this podcast. I get invested in their success. I want them to live a rich life, even if it's hard. And when I don't hear back from them, it's frustrating. What I ask is that they show up in our conversations and then they follow up with me. That's it. The follow ups aren't just for me. They're for them so that they follow through on the things we discussed. And when I talk to couples who don't follow up, sometimes the hardest part is not our conversation. A lot of times I think they realize it's what comes next. Clara and Devin, I hope you took something meaningful from our time together. And wherever you are now, I truly wish you the best. My invitation for a follow up is an open invitation.

[Unknown Expert]

I would love to hear back from you.

[Ramit Sethi]

If you want my help with your specific money questions, you can apply to be on this [e-mail] apply or or you can become a member of my money coaching program [e-mail] Moneycoaching in money coaching, you get access to monthly calls where I answer your questions directly on a private call. And I get the chance to go much deeper on the concepts of money that have made a huge change in my life. Plus, you'll get access to a community of other people like you who will inspire, inspire you and push you to.

[Unknown Expert]

Live your rich life.

[Ramit Sethi]

Check out money [e-mail] moneycoaching.